Case laid out against former water official Steve Collins

Former county water board member Steve Collins told an investigator it was his job to "broker" the regional desalination project when he worked for a private consulting firm on the now-failed proposal.

During a preliminary hearing Tuesday on conflict of interest and other charges against Collins, prosecutor Stephanie Hulsey played an interview with Collins in which he described his role in helping the proposal's partners work through key issues at the heart of the project agreements. Those agreements had been stalled by an often rancorous relationship among California American Water, the Marina Coast Water District and the county Water Resources Agency.

Testimony and evidence introduced at the all-day hearing indicated Collins was involved in nearly every aspect of the project through most of 2010, from fashioning a financing plan and seeking low-cost public funding to advocating for the project before local and state officials.

Collins' efforts represented a conflict of interest, prosecutors say. He had a financial stake in the project agreements, being paid more than $160,000 by RMC Water and Environment, which was employed by Marina Coast, for the work he did on the project while he was a public official — a prohibited dual role.

Collins is facing more than three dozen felony charges for allegedly accepting payments he wasn't entitled to receive or hadn't earned. In addition to being paid by RMC, Collins allegedly accepted money from his former employer, Ocean Mist Farms, for public meetings.

But defense attorney Mike Lawrence indicated during Tuesday's hearing that he would argue Collins was asked to take the lead on closing the project and was assured by county officials and legal counsel that his dual role was not a conflict.

Lawrence said his client's efforts benefitted everyone involved and thus shouldn't be considered a crime. He said it was only a "lapse of memory" by county officials that left Collins facing charges.

Deal with RMC

Hulsey laid out the case against Collins, introducing invoices detailing his efforts on behalf of the project, and his agreement with RMC. Company principal Lyndel Melton told an investigator RMC paid Collins $220 an hour to help resolve Ag Land Trust litigation challenging the project's environmental review and to bring the project partners together to smooth the way at the state Public Utilities Commission.

The original pact between Collins and RMC began in January 2010. It was only supposed to be worth $25,000 and last about three months, but its value expanded along with Collins' efforts and his advocacy as the project was delayed until late in 2010, according to testimony.

At one point, according to an investigator, Collins began actively defending the project agreements against questions from the PUC's Division of Ratepayer Advocates and the Monterey Peninsula Water Management District. Evidence suggested Collins urged county supervisors and the PUC to approve key agreements while arguing that each had insisted on proceeding.

Marina Coast general manager Jim Heitzman told an investigator he eventually realized Collins' work had expanded in what he called "scope creep," and he began expressing concerns about a potential conflict. That sparked a debate in June 2010 involving county and Marina Coast officials and legal counsel over whether a legal conflict existed.

Heitzman told the investigator he finally refused to continue paying the RMC bills after Collins failed to resign from the county water board and no legal opinion immediately materialized.

Later, Collins asked Cal Am President Rob MacLean for help getting paid for the work he did on the project, offered his services to Cal Am and even billed the county for his efforts, according to testimony.

According to the investigator, RMC's Melton said Collins and former county water agency general manager Curtis Weeks told him they had plans to work on the regional project through their own private consulting firm, Collins-Weeks Consulting.

When Salinas Valley Water Coalition consultant Nancy Isakson discovered Collins' dual role and raised questions about it, the investigator testified Isakson told her Collins first tried to convince her there was no conflict and then threatened her and the coalition.

Legal advice

During cross-examination, Lawrence focused on legal advice — or the lack of it — that Collins received, including the debate over whether his work represented a potential conflict and which officials knew what and when regarding the issue.

Lawrence pointed out that County Counsel Charles McKee acknowledged in a letter to the coalition that Collins had been "misadvised" by Deputy County Counsel Irv Grant, the county water agency's assigned counsel during the bulk of the project proceedings, and that attorneys from county-hired Downey Brand indicated they believed there was no conflict or produced a legal opinion that was open to interpretation.

Lawrence also focused on clear differences between the recollections of various public officials, including Weeks and Heitzman, about how Collins was recruited and the scope of his duties.

Lawrence suggested during questioning that Collins' work on the project couldn't reasonably be considered part of regular county water board member duties, especially as defined by the Agency Act, and that his client was simply performing a valuable service intended to benefit all area interests by securing a new water supply and avoiding an "extreme crisis on the Monterey Peninsula."